8th MAHAMANA MALAVIYA NATIONAL MOOT COURT

COMPETITION 2020

TEAM CODE: MCC-07

IN THE HON’BLE SUPREME COURT OF WAKANDA, AT NEW WAKANDA CITY,

WAKANDA

Special Leave Petition No. _______/ 2020

IN THE MATTER BETWEEN

Avengers Pvt. Limited ….Petitioner

v.

Thanos Pvt. Limited ….Respondent

SUBMISSION TO THE HON’BLE SUPREME COURT OF WAKANDA

UNDER ARTICLE 136 OF THE CONSTITUTION OF WAKANDA

MEMORIAL ON THE BEHALF OF THEPETITIONER

COUNSEL APPEARING ON BEHALF OF THE PETITIONER

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TABLE OF CONTENTS

LIST OF ABBREVIATION…………………………………………………………iv

INDEX OF AUTHORITIES…………………………………………………………vi

STATEMENT OF JURISDICTION…………………………………………………x

STATEMENT OF FACTS…………………………………………………………..xi

STATEMENT OF ISSUES…………………………………………………………xiii

SUMMARY OF ARGUMENTS……………………………………………………xiv

ARGUMENTS ADVANCED………………………………………………………xv

1. WHETHER THE APPLICATION FILED UNDER SECTION 9 OF THE ACT

RIGHTLY REJECTED BY THE HIGH COURT OF NEW WAKANDA CITY.
1.1. That the Avengers have the remedy to approach the appropriate authority under
The Patent Act, 1970.
1.2. That there is urgency and gravity in the matter due to which Avengers filed the
application.
1.3. That the Nebula is a party to the arbitration agreement.
2. WHETHER THE SUIT BEFORE THE HIGH COURT OF NEW WAKANDA CITY
RIGHTLY DISMISSED BASIS THE SECTION 5 AND 8 APPLICATION FILED BY
AVENGERS.
2.1. Whether the application made by Avengers u/s 5 and 8 was the subject matter of
DSA.
2.2. That the anti arbitration injunction against Avengers is valid or not.
2.3. That the dispute under DSA is purely contractual or not.
3. WHETHER THE SOLE ARBITRATOR IS TO BE APPOINTED IN ACCORDANCE
WITH THE PROCEDURE MENTIONED IN THE ARBITRATION AGREEMENT
UNDER DSA, UNDER SECTION 11 APPLICATION BEFORE SUPREME COURT
OF WAKANDA.

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3.1. Whether the appointment of sole arbitrator under clause 16.2 of DSA is arbitrary
in nature or not.
3.2. Whether there was a valid contract under clause 16.2 and 16.3 of DSA.

PRAYER…………………………………………………………………………….xxxv

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LIST OF ABBREVIATIONS

& And

AC Appeal Cases

ADRLJ Arbitration and Dispute Resolution

Law Journal

AIR All India Reporter

All ER England Report

Arb LR Arbitration Law Reporter

Art Article

CEDR Centre for Dispute Resolution

Co. Company

DSA Development Service Agreement

FICCI Federation of Indian Chambers of

Commerce and Industry

Hon’ble Honorable

IBA International Bar Association

ICA Indian Council of Arbitration

ICADR International Centre for Alternative

Dispute Resolution

ICC International Chamber of Commerce

ICCA International Council for

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Commercial Arbitration

ICJ International Court of Justice

ILR International Law Reports

Ltd Limited

KB King’s Bench

MSA Master Service Agreement

Ors Others

Para Paragraph

PC Privy Council

Pvt Private

QBD Queen’s Bench Division

SC Supreme Court

SCC Supreme Court Cases

SCR Supreme Court Reporter

UNCITRAL United Nation Commission for

International Trade Law

u/s Under Section

WIPO World Intellectual Property

Organization

WLR Weekly Law Report

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INDEX OF AUTHORITIES

STATUTES

 The Arbitration and Conciliation Act, 1996

 The Competition Act, 2002
 The Constitution of India, 1950
 The Indian Contract Act, 1872
 The Patent Act, 1970

BOOKS REFERED

 1 ANIRUDH WADHWA & ANIRUDH KRISHNAN LAW OF ARBITRATION &

CONCILIATION (6th ed., Lexis Nexis, 2018)
 6, INTERNATIONAL INTELECTUAL PROPERTY LAW & POLICY, (HUGH C.
HANSEN)
 AVTAR SINGH, LAW OF ARBITRATION & CONCILIATION & ALTERNATIVE
DISPUTE RESOLUTION SYSTEM (11th ed., Eastern Book Company, 2018)
 Dr. N.V. PARANJAPE, LAW RELATING TO ARBITRATION & CONCILIATION IN
INDIA (7th ed., Central Law Agency, 2017)
 Dr. PC MARKANDA, LAW RELATING TO ARBITRATION & CONCILIATION (9th
ed., Lexis Nexis, 2016)
 Dr. U. PATTABHI RAMIAH, ARBITRATION & ADR (2nd ed., Asian Law House,
Hyderabad, 2018)
 ELIZABETH VERKEY, LAW OF PATENTS (2nd ed., EASTERN BOOK COMPANY,
LUCKNOW, 2012)
 JUSTICE D.Y. CHANDRACHUD, ALTERNATIVE DISPUTE RESOLUTION (1 st ed.,
oxford University Press, 2018)
 LIONEL BENTLY & BRAD SHERMAN, INTELECTUAL PROPERTY LAW (4th ed.,
OXFORD UNIVERSITY PRESS, 2014)

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 MADHUSUDAN SAHARAY, THE TEXTBOOK ON ARBITRATION &

CONCILIATION WITH ALTERNATIVE DISPUTE RESOLUTION (4th ed., Univesal
Law Publishing, 2017)
 N. D. BASU’S, ARBITRATION & CONCILIATION (13th ed., ORIENT PUBLISHING
COMPANY, 2015)
 O.P. MALHOTRA, THE LAW & PRACTICE OF ARBITRATION & CONCILIATION
(3rd ed., Thomsan Reuters, 2014)
 P. NARAYANAN, PATENT LAW (4th ed., EASTERN LAW HOUSE, 2017)
 ROCHELLE C. DREYFUSS & JUSTINE PILA, THE OXFORD HANDBOOK OF
INTELECTUAL PROPERTY LAW (1st ed., OXFORD UNIVERSITY PRESS, 2018)
 V.A. MOHTA, ARBITRATION & CONCILIATION (1st ed., All India Reporter Pvt.
Ltd., 2001)

CASES REFERED

1) Adhunik Steels Ltd. V. Orissa Manganese & Minerals Pvt Ltd., (2007) 7 SCC, 125.
2) Agri Gold Exims Ltd. v. Sri Lakshmi Knits and Wovens and Ors., (2007) 3 SCC 686.
3) Amit Sinha v. Summit Mittal & Ors., (2011) 1 Arb LR, 332 (Del).
4) Andhra Bank Ltd. v. R. Srinivasan AIR 1962 SC 232.
5) Ariba India Pvt. Ltd. v. Ispat Industries Ltd., (2011) 3 Arb LR 163.
6) Balco v. Kaiser aluminium Technical CIVIL APPEAL NO.7019 OF 2005.
7) Board of Trustees of the Port of Kolkata v. Louis Dreyfus Armatures SAS & others, AIR
2006 ,Cal 176-9, P&H 124.
8) Bramer Vulkan Schiffbau & Maschinenfabrik v. South India Shipping Corporation,
(1981) 1 All ER, 289.
9) Chintakayala Shivaramakrishna v. Nandimpali venkata Rama Raju, (2013) 1 Arb LR,
384 (AP).
10) Chloro Controls India Pvt. Ltd. v. Severn Trent Water Purification Inc. & Ors, (2013) 1
SCC 641.
11) Clayton Brokerage Co v. Teleswitcher Corp, 555 F.2d 1349 (8th Cir. 1977).
12) Country Development Management Services Pvt. Ltd. v. Brookside Resorts Pvt. Ltd.,
2006 (Suppl) Arb LR, 248.

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13) D. Raja Reddy v. Director General Institute of Agricultural Extension Management,

(1992) 2 Arb LR 212
14) Deniel (Proprietary) Ltd. v. Union of India &Anr., (2010) 2 Arb LR, 69 (Del).
15) Dharma Pratishthnaman v. Madhok Construction., (2005) 9 SCC 686.
16) Dow Chemical v. Isover Saint Gobain,(1984) Reb Arb, 137.
17) Exotel mobile communication Ltd v. union of India, (1998) 3 RAJ 307 (Del).
18) Govt. of Goa v. Jaisu Shipping Co. Pvt Ltd., (2010) 3 Arb LR 493(Bom).
19) Gujarat Bottling Co. Ltd. & Ors. v. Coca Cola Co. & Ors., (1995) 5 SCC 545 (India).
20) Harinarayan G.Bajaj v. Share deal Financial Consultancy P. Ltd, AIR 2003, Bom 296.
21) Himachal Sorang Power Private Limited &Anr. v. NCC Infrastructure Holdings Ltd,
decided on 13th March 2019.
22) In House Productions Pvt. Ltd. v. Meediya Plus, (2005) 3Arb LR, 52 (Mad)(DB).
23) India Household and Healthcare Ltd. v. LG Household and Healthcare Ltd (2007) 5 SCC
510.
24) International Airport Authority of India v. KD Bali, (1988) 1 Arb LR, 408.
25) Intertoll ICS Cecons O & M Co. Pvt. Ltd. v. NHAI, (2013) 1 Arb LR, 517 (Del).
26) ITC Classic Finance Ltd v. Graphic Minning&CO Ltd (1997) AIR 397(Cal).
27) Jeweltouch (India) Pvt. Ltd. v. Naheed Hafeez Qureshi (Patrawala) (2008) 2 Arb LR,
321 (Bom).
28) Khardoh & Co. v. Raymon & co. (1962) AIR SC 18-10.
29) Mahanagar Telephone Nigam Limited v. Canara Bank & Ors, Civil Appeal No. 6202-
3205 of 2019
30) M/S Kadimi International Pvt. ... v. M/S Emaar Mgf Land Limited on 29 August, 2019.
31) M/s Sundaram Finance Ltd. v. N.E.P.C., (1992) 2 SCC 479.
32) M/s. Addhar Mercantile Pvt. Ltd. v. Shree Jagdamba Agrico Exports Pvt. Ltd-
Arbitration Application No 197 of 2014 along with Arbitration Petition No 910 of 2013.
33) Mc Donald indiapvt ltd V. VikramBakshi , (2016) SCC Del 3949.
34) Ministry of Sound International v. M/s Indus Renaissance Partners I.A. NO. 2926/2008
IN CS (OS) NO. 241/2008.
35) MMTC Ltd. v. Sterlite Industries (India) Pvt. Ltd, (1996) 6 SCC, 716.
36) National Fertilizer Corporation v. Puran Chand Nangia, (2000) 8 SCC 343.

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37) North East Securities Ltd. v. Sri Nageswara Chemicals and Drugs Pvt.Ltd., (2001) 1 Arb
LR, 70(AP).
38) P. Anand Gajapathi Raju &Ors. v. P.V.G. Raju (Died) &Ors, (2000) 4 SCC 539.
39) P.k Bajaj v. Reminiscent India Television Ltd (2006) 2 Arb LR 361
40) Rajiv Vyas v. Juhuwin Manavalan & Ors, (2009) 3 Arb LR, 397(Bom).
41) Rapti Contractors v. Reliance Energy Lts. & Ors., (2009) 2 Arb LR 7(Del).
42) Rashtriya Ispat Nigam Limited and Anr. v. Verma Transport Company, (2006) 7 SCC
275.
43) Rawalpindi Theatre v. Patanjali (1967) AIR, (Punj) ,241
44) S.S. Den of Airlie Co. Ltd. v. Mitsui & Co. Ltd., (1912) 106 LT 451
45) Sati Udyog Ltd. v. Avanti Projects & Infrastructure Ltd., (2009) 1 Arb LR, 154 (Guj).
46) Shin Satelite Public Co. Ltd. v. Jain Studios, (2008) 2 Arb LR, 242(Del).
47) Shining Industries v. Shri krishna Industries, (1975) AIR, ALL LJ 960.
48) Shivagun Factory v. Dharam Chand, (1995) 2 Arb LR, 111 (J&K),
49) Smt. Kalpana Kothari v. Smt. Sudha Yadav and ors. Civil Appeal 7407-7406 of 2001,
Decided on 31 October 2001
50) State of New Jersey Department of Environmental Protection v. Ventron Corp, 468 A.2d
150 (1983)
51) SVG Molasses Co BV v Mysore Mercantile Co Ltd (2007) 9 SCALE 89
52) Trishul Const. Co. v. Delhi Development Authority, (1994) 2 Arb LR, 303 (Del),
53) Vanita Gambhir v. District Judge, Delhi, (2005) 1 RAJ 188, 193
54) Veritas Shipping Corpn v. Anglo-Canadian Cement Ltd., (1996) 1 Lloyd’s Rep 76-77
55) World Sport Group (Mauritius) Limited v. MSM Satellite (Singapore) Pte. Ltd: , (2014)
11 SCC 639
56) Galatea Ltd vs Diyora & Bhanderi Corporation, Civil Suits No. 2 of 2017, Decided On:
26.03.2018(GUJ HC).

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STATEMENT OF JURISDICTION

I. The Petitioner has approached the Hon’ble Supreme Court under Article 1361 of
the Constitution of Wakanda.
II. The Respondent has approached the Hon’ble Supreme Court under Article 136 of
the Constitution of Wakanda.

1
Article 136- Special Leave to appeal by the Supreme Court
(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to
appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made
by any Court or tribunal in the territory of India.
(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order passed or made by any
Court or tribunal constituted by or under any law relating to the Armed Forces.

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STATEMENT OF FACTS

1. The material case arises out of three separate issues; first, Avengers Pvt. Limited is
challenging the dismissal of application made u/s 9 of the Act by the High Court; second,
Thanos Pvt. Limited is challenging the dismissal of the suit made u/s 5 and 8 by the High
Court; third, the process of appointing the sole arbitrator according to the arbitration
agreement was challenged.
2. BACKGROUND
Thanos Pvt. Ltd. is a private company of Republic of Titan, which is engaged in the
business of selling of extremely safe cars with bullet proof mechanism. These cars are
made by a very complex alloy which is made from very specific extracts of adamantium
and vibranium ores. Avengers Pvt. Ltd. is a private company of Republic of Wakanda
which is engaged in business of extraction from metal ores of adamantium and
vibranium. It is the pioneer and also engaged in development of highly advanced
technology of manufacturing related alloys. Due to same it has over 150 patents in its
name related to various parts and screws.
Thanos was unable to manufacture Cap’am and approached Avengers to enter into an
agreement with it to optimize Thanos process of manufacturing Cap’Am using Avenger’s
screw extruder technology.
3. FIRST PHASE
In August 2013, Avengers and Thanos entered into a Master Service Agreement (MSA)
in relation to the deployment for conduct and optimization of Thanos’ process of
manufacturing the Cap’Am using Avengers screw extruder technology and technical
know-how. By December 2014 the process of manufacturing was optimized at small
scale but it was unviable for manufacturing at commercial level.
4. SECOND PHASE
To make the process of manufacturing Cap’Am viable at commercial level, Thanos made
a presentation about buying equipment worth USD 71.1 million from Avengers over 10
years and for that they entered in a Development Service Agreement (DSA) in October
2015. Under DSA, Avengers had to “construct, assemble and assist in operating a pilot
plant to demonstrate the scale-up of Thanos process of Cap’Am using Avengers screw

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extruder technology” (Large Scale Process). Avengers had to set up their equipment in
the premises of a subsidiary company of Thanos in Wakanda, i.e. Nebula.
The DSA provided three milestones and upon the success of the third milestone payment
has to make by the Thanos to Avengers. Milestone 1 was Equipment for Large Scale
Process is delivered and commissioned as per agreed specification by Avengers; second,
equipment for Large Scale Process performs as per the agreed specification; and third,
achievement of finished product specification as set out in the success criteria that is the
quality check.
5. INFRINGEMENT
In May 2018, Avengers informed Thanos that it has demonstrated a successful scale-up
and product was released for quality check. The quality check was taking a long time and
Avengers was continuously following up with Thanos for the same and the payment to be
done. In February 2019, Avengers comes to know that Thanos applied for a patent in a
process for manufacturing Cap’Am at mass commercial level.
Avengers was shocked to see that on one hand Thanos is kept delaying the payment
under Milestone 3, and on the other hand Thanos is receiving award for the technical
know-how and confidential information of Avengers and also mischievously getting the
confidential information patented under its own name.
6. THE RESULTANT LITIGATION
In April 2019, Avengers filed an suit in High Court of New Wakanda City, u/s 9 of The
Arbitration and Conciliation Act, 1996 for injuncting Thanos and Nebula from
Proceeding with the Patent Application and sought to restrain Thanos and Nebula from
disclosing the confidential information to any third party. The High Court rejected the
application on the ground that Avengers must approach authority under Patents Act.
Aggrieved by that Avengers filed the Special Leave Petition in Supreme Court.
In August 2019, Thanos filed a suit in the High Court for permanent injunction against
Avengers and restrain from disclosing the information to any third party. The said suit
was dismissed by the High Court on the basis of application filed by Avengers u/s 5 and
8 of the Act. Aggrieved by that, Thanos also filed an SLP in Supreme Court. Court has
clubbed both the petitions.

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STATEMENT OF ISSUES

1. Whether the application filed under section 9 of the Act rightly rejected by the High
Court of New Wakanda city.
2. Whether the suit before the High Court of New Wakanda city rightly dismissed basis
the section 5 and 8 application filed by Avengers.
3. Whether the sole arbitrator is to be appointed in accordance with the procedure
mentioned in the arbitration agreement under DSA, under section 11 application
before Supreme Court of Wakanda.

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SUMMARY OF ARGUMENTS
1. Whether the application filed under Section 9 of the Act rightly rejected by the
High Court of New Wakanda city.
It is humbly submitted by the Petitioner that the application is not rightly rejected by
the High Court of New Wakanda City under Section 9 of the Act as there was gravity
and urgency in the present case and according the jurisdiction of the High Court in
the Arbitration and Conciliation Act, for any international commercial arbitration,
petitioner can approach the High Court for seeking injunction.
2. Whether the suit before the High Court of New Wakanda city rightly dismissed
basis the Section 5 and 8 application filed by avengers.
It is humbly submitted by the Petitioner that the suit is rightly rejected by the High
Court of New Wakanda City on the basis of the application file under Section 5 & 8
as the anti-arbitration suit against Avengers was not valid and the issue raised are to
be dealt under arbitration proceedings.
3. Whether the sole arbitrator is to be appointed in accordance with the procedure
mentioned in the arbitration agreement under DSA, under Section 11
application before Supreme Court of Wakanda.
It is humbly submitted by the Petitioner that the sole arbitrator should not be
appointed under Section 11 of the Act as the clauses of DSA are arbitrary in nature
and such appointment of the sole arbitrator will lead to partiality, biasness and such
arbitrator will lack the independency.

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ARGUMENTS ADVANCED

 Whether the application filed under Section 9 of the Act rightly rejected by the
High Court of New Wakanda city.
It is humbly submitted before this Hon’ble Supreme Court that Section 9(ii) (d) (e) 2 of
The Arbitration and Conciliation Act, 1996, deals with interim measures etc. by Court
and states that - a party may, before or during arbitral proceedings or at any time after the
making of the arbitral award but before it is enforced in accordance with Section 36,
apply to a Court-
Section 9(ii) for an interim measure of protection in respect of any of the following
matters, namely:
(d) Interim injunction or the appointment of a receiver;
(e)such other interim measure of protection as may appear to the Court to be just
and convenient, and the Court shall have the same power for making orders as it
has for the purpose of, and in relation to, any proceedings before it.

An interim injunction can only be granted in respect of enforcement or protection of legal

or equitable right3. In the case of Adhunik Steel Ltd. v. Orissa Manganese & Minerals
Pvt. Ltd.4, the Supreme Court defined ‘injunction’ as a form of specific relief. It is an
order of a Court requiring a party either to do a specific act or acts or to refrain from
doing a specific act or acts either for a limited period or without limit of time. In relation
to a breach of contract, the proper remedy against a defendant who acts in breach of its
obligation under a contract is either damages or specific relief.

The Supreme Court in the case of M/s Sundaran Finance Ltd. v. N.E.P.C India Ltd. 5,
considered the question whether a party can approach a Court for injunction even before
the arbitration process has actually started. The Court held that interim measures of
protection u/s 9 can be granted even prior to the initiation of arbitration proceedings.

2
The Arbitration and Conciliation Act, 1996, Act No. 26, Acts of Parliament, 1996(India)
3
Bramer Vulkan Schiffbau & Maschinenfabrik v. South India Shipping Corporation, (1981) 1 All ER, 289
4
Adhunik Steels Ltd. V. Orissa Manganese & Minerals Pvt Ltd., (2007) 7 SCC 125, Govt. of Goa v. Jaisu Shipping
Co. Pvt Ltd., (2010) 3 Arb LR, 493(Bom), Sati Udyog Ltd. v. Avanti Projects & infrasture Ltd., (2009) 1 Arb LR,
154 (Guj), Shin Satelite Public Co. Ltd. v. Jain Studios, (2008) 2 Arb LR, 242(Del)
5
M/s Sundaram Finance Ltd. v. N.E.P.C., (1992) 2 SCC 479, Intertoll ICS Cecons O & M Co. Pvt. Ltd. v. NHAI,
(2013) 1 Arb LR, 517 (Del)

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It is humbly submitted that under Section 9, High Court of New Wakanda City did not
rightly reject the application filed by the Avengers.

That the Avengers have the remedy to approach the appropriate authority under
The Patent Act, 1970.

In terms of the arbitration agreement under DSA, Avengers had filed an application u/s 9
of the Arbitration and Conciliation Act, 1996 before the High Court of New Wakanda
City for injuncting Thanos and Nebula from proceeding with the Patent Application.
It is humbly submitted that petitioner has the right to move an application u/s 9 of the Act
to High Court as Section 2(1)(e) of the Act defines the term ‘Court’ as “Court” means—
(i) in the case of an arbitration other than international commercial arbitration 6, the
principal Civil Court of original jurisdiction in a district, and includes the High Court in
exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the
questions forming the subject-matter of the arbitration if the same had been the subject-
matter of a suit, but does not include any Civil Court of a grade inferior to such principal
Civil Court, or any Court of Small Causes;
(ii) in the case of international commercial arbitration, the High Court in exercise of its
ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the
subject-matter of the arbitration if the same had been the subject-matter of a suit, and in
other cases, a High Court having jurisdiction to hear appeals from decrees of Courts
subordinate to that High Court.
Accordingly, in case of an international commercial arbitration, i.e., an arbitration
relating to a commercial dispute where at least one of the parties is non- Indian, only a
High Court of a State in India will have powers under the Act.
The Court when approached by a party at the pre-reference stage i.e., before the
commencement arbitral proceedings, may consider grant of interim relief. The Court

6
“international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships,
whether contractual or not, considered as commercial under the law in force in India and where at least one of the
parties is—
(i) an individual who is a national of, or habitually resident in, any country other than India; or
(ii) a body corporate which is incorporated in any country other than India; or
(iii) 2*** an association or a body of individuals whose central management and control is exercised in any
country other than India; or
(iv) the Government of a foreign country;

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shall have powers for passing orders, as in the case of a Civil Court considering grant of
injunctive relief upon the applicant establishing a strong prima facie case, irreparable
prejudice and balance of convenience.
In Gujarat Bottling Co. Ltd. & Ors. v. Coca Cola Co. & Ors 7. the Supreme Court holding
that the power to grant interlocutory injunction is discretionary, listed out the following
tests applicable to the exercise of such discretion-
1) Whether plaintiff has a prima facie case,
2) Whether the balance of convenience is in favour of the plaintiff, i.e., whether it could
cause greater inconvenience to him if injunction is not granted than the inconvenience
which the other side would be put to if the injunction is granted8.
3) Whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory
injunction is disallowed.

Once the Court finds that a prima facie case is made out in favour of the applicant, it
must further decide whether an irreparable injury would be caused to him if the relief is
not granted. In this context, an irreparable injury is a material injury that cannot be
adequately compensated by awards of damages, and no other remedy is available to the
applicant except an injunction. Furthermore, the Court also must record the conclusion
that as the balance of convenience lies in favour of the applicant, and that comparative
hardship, mischief or inconvenience is likely to occur if injunction is not granted; it may
in its judicial discretion grant the injunction. These well-established principles of the law
of injunctions apply to grant of injunctions u/s 9 of the Arbitration Act as well9.

In the present case the respondent has infringed the rights under Intellectual Property of
the petitioner as the Avengers had already pending applications for the Patent and Thanos
also filed the Patent application for the same and also disclosing the confidential
information of technical know-how in the very same Large Scale Process Patented under
its own name.
7
Gujarat Bottling Co. Ltd. & Ors. v. Coca Cola Co. & Ors., (1995) 5 SCC 545 (India), Country Development
Management Services Pvt. Ltd. v. Brookside Resorts Pvt. Ltd., 2006 (Suppl) Arb LR, 248, Rajiv Vyas v. Juhuwin
Manavalan & Ors, (2009) 3 Arb LR, 397(Bom)
8
Deniel (Proprietary) Ltd. v. Union of India & Anr., (2010) 2 Arb LR, 69 (Del), Amit Sinha v. Summit Mittal &
Ors., (2011) 1 Arb LR, 332 (Del), Jeweltouch (India) Pvt. Ltd. v. Naheed Hafeez Qureshi (Patrawala), (2008) 2 Arb
LR, 321 (Bom)
9
In House Productions Pvt. Ltd. v. Meediya Plus, 2005 (3) Arb LR 52 (Mad)(DB)

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That there is urgency and gravity in the matter due to which Avengers filed the
application.

It is humbly submitted by the petitioner that this is the matter of grave urgency and
gravity as Avengers, being a small scale industry was already suffering from a huge
financial losses as the payment has not been done by the Thanos and secondly the
respondent also proceed with the patent application for the Avengers’ Technology Know-
how which was already published in the newspaper and mischievously getting Avengers
confidential information.

It is humbly submitted that the respondent have a newspaper publication of their Patent
Application which shows that they must have been applied for the patent during the
process of production of Cap’am and this fact was concealed from Avengers which
proves the malafide intention of Thanos in obtaining the patent.

In the case of Galatea Ltd vs Diyora And Bhanderi Corporation, it is contend by the
plaintiffs that the defendants, with a malafide intention to usurp the business of the
plaintiffs, have sought to ride on the years of research and development devoted by
plaintiff no.1 in investigating, developing, manufacturing and constantly upgrading its
Suit Patent and are unjustly enriching themselves at the cost and expense of the plaintiffs
and such an infringing enterprise of the defendants, being run covertly and
surreptitiously, shows malafide intention of the defendants10.

Under the Patent Act, 1970, publication of a patent application is one of the prime stages
in the process of getting a patent. The publication date of the patent application is
considered of a specific significance because the applicants' advantages as well as rights
start from the publication date.

10
Galatea Ltd vs Diyora And Bhanderi Corporation, Civil Suits No. 2 of 2017, Decided On: 26.03.2018(GUJHC).

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Secondly, the process of appointing the sole arbitrator under Section 11 was arbitrary in
nature and because if once the arbitral award would have been passed, it becomes binding
over the parties and Avengers left with no other option.

That the Nebula is a party to the arbitration agreement.

In the present case, Avengers is a small scale industry and to complete the project of
Thanos, Avengers set-up the equipment at the premises of Nebula Pvt. Ltd. in Wakanda,
and Thanos is the parent company of Nebula.

There are different jurisdictions that have accepted what is known as the “group of
company’s doctrine”. As per the doctrine, though the scope of an arbitration agreement is
limited to the parties who entered into it and those claiming under or through them, the
Courts under the English Law have, in certain cases, also applied the "Group of
Companies Doctrine". This doctrine has developed in the international context, whereby
an arbitration agreement entered into by a company, being one within a group of
companies, can bind its non- signatory affiliates or sister or parent concerns, if the
circumstances demonstrate that the mutual intention of all the parties was to bind both the
signatories and the non-signatory affiliates. This theory has been applied in a number of
arbitrations so as to justify a tribunal taking jurisdiction over a party who is not a
signatory to the contract containing the arbitration agreement

One of the earliest known adoptions and promulgation of the 'Group of Companies'
doctrine can be traced to the ICC arbitral award in Dow Chemical v. Isover-Saint-
Gobain11. In that matter, the dispute arose out of several contracts executed by various
Dow Chemical Company subsidiaries (but not Dow Chemical Company itself) and
Isover. Dow Chemical Company together with its subsidiaries commenced arbitration.
Isover objected to jurisdiction over the claims asserted by Dow Chemical Company on
the ground that the latter was not a party to the contract. The tribunal upheld its
jurisdiction. In its award, the ICC arbitral panel stated that mere corporate ties between
different companies were not enough to bind them to a single arbitration and the non-

11
Dow Chemical v. Isover Saint Gobain, (1984) Reb Arb, 137

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signatory companies must have played an essential role in the 'conclusion, performance
or the termination´ of the contracts.

"Considering that irrespective of the distinct juridical identity of each of its members, a
group of companies constitutes one and the same economic reality of which the arbitral
tribunal should take account when it rules on its own jurisdiction subject to Article 13
(1955 version) or Article 8 (1975 version) of the ICC Rules.

In relation to the condition related to the relationship between these companies, the
signatory and non signatory companies, it is important to identify if these companies are
controlled by the same parent company. This issue was discussed in Clayton Brokerage
Co v. Teleswitcher Corp12 case  as well as in State of New Jersey Department of
Environmental Protection v. Ventron Corp13  , where it was essential for the tribunals to
investigate about the extant to which the parent company has controlled other subsidiaries
in order to apply the group of companies doctrine.

The Courts decided that this doctrine might be applies only if there was a real connection
between the parent company and its subsidiaries, it was stated that when the parent
company decides on all its subsidiaries’ business decisions without having any discussion
with the concerned subsidiary Courts allowed the application for the aforementioned
doctrine. Also, it was possible to extend the arbitration to a parent company where the
subsidiary main work is for the exclusive benefit of the parent company

In Indian context also the non-signatory company is bound by an arbitration agreement.

On appeal to the division bench, the Court looked at the factual relationship between the
said agreements. It considered some of its previous pronouncements. In Chloro Controls
India Pvt. Ltd. v. Severn Trent Water Purification Inc. & Ors.14, the Court had examined
the scope of Section 45 under the Part II of the Arbitration & Conciliation Act, applicable
to international commercial arbitration, which gives the judicial authority the power to
refer the parties to arbitration. According to the Section, the Court may refer the parties to
arbitration at the request of either party or any person claiming through or under them.
12
Clayton Brokerage Co v. Teleswitcher Corp, 555 F.2d 1349 (8th Cir. 1977)
13
State of New Jersey Department of Environmental Protection v. Ventron Corp, 468 A.2d 150 (1983)
14
Chloro Controls India Pvt. Ltd. v. Severn Trent Water Purification Inc. & Ors. (2013) 1 SCC 641

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In  Chloro Controls, the Court decided that the phrase “any person claiming through or
under him” must be read to include a non-signatory third party. Provided that “the
transaction should be of a composite nature where performance of the mother agreement
may not be feasible without aid, execution and performance of the supplementary or
ancillary agreements, for achieving the common object and collectively having bearing
on the dispute. Besides all this, the Court would have to examine whether a composite
reference of such parties would serve the ends of justice”.

The Supreme Court, while invoking the doctrine of "Group Companies" permitted a non-
signatory to an arbitration agreement to participate in the arbitration proceedings. The
Supreme Court observed that a non-signatory may be bound by an arbitration agreement
where the parent or holding company, or a member of the group of companies is a
signatory to the arbitration agreement and the non-signatory entity on the group has been
engaged in the negotiation or performance of the commercial contract, or made
statements indicating its intention to be bound by the contract, the non-signatory will also
be bound and benefitted by the relevant contracts. In the instant case, the Supreme Court
observed that there was enough factual background to suggest that the parties intended to
bind the non-signatory party to the arbitration proceedings15.

 Whether the suit before the High Court of New Wakanda city rightly dismissed
basis the Section 5 and 8 application filed by avengers.
The counsel on behalf of the petitioner humbly submits before this Hon’ble Court that the
suit dismissed by High Court on the basis of an application filed under Section 5 and 8 by
Avengers is rightly dismissed.

“Section 5 of the Arbitration and Conciliation Act 1996 16 states extent of judicial
intervention notwithstanding anything contained in any other law for the time being in
force, in matters governed by this Part, no judicial authority shall intervene except where
so provided in this Part.”

15
Mahanagar Telephone Nigam Limited v. Canara Bank & Ors, Civil Appeal No. 6202-3205 of 2019
16
The Arbitration and Conciliation Act, 1996, Act No. 26, Acts of Parliament, 1996(India), Section 5

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Section 8 of herein referred to as the Act17 states the Power to refer parties to arbitration
where there is an arbitration agreement. Wherein sub-section (1) states “ A judicial
authority, before which an action is brought in a matter which is the subject of an
arbitration agreement shall, if a party to the arbitration agreement or any person claiming
through or under him, so applies not later than the date of submitting his first statement
on the substance of the dispute, then, notwithstanding any judgment, decree or order of
the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima
facie no valid arbitration agreement exists.” And sub-section (2) states that the
application referred to in sub-section (1) shall not be entertained unless it is accompanied
by the original arbitration agreement or a duly certified copy thereof:

The counsel on behalf of the petitioner humbly submits that Section 5 does not forbid the
institution of a suit it only provides that in case any matter is covered by an arbitration
agreement, judicial intervention will only be as far as it is allowed under the Act 18. For
the purpose of this Section “judicial intervention” is statutorily allowed in respect of the
matters to the exclusion of its residual or inherent powers 19 of which it will have the
power to refer the parties to arbitration when there is an arbitration agreement (Section 8)

The Court refused to intervene where the agreement between the parties provided that
dispute and differences to be settled by the named arbitrator 20 and on an application under
sub-section 1 of Section 8 the judicial authority is only concerned to see that the matter
on which the suit has been instituted is also the subject matter of the arbitration
agreement21.

In P. Anand Gajapathi Raju &Ors. V. P.V.G. Raju (Died) &Ors 22., while iterating the
periphery of Section 8 of the 1996 Act, the Supreme Court said that “The conditions
which are required to be satisfied under Sub-sections (1) and (2) of Section 8 before the

17
The Arbitration and Conciliation Act, 1996, Act No. 26, Acts of Parliament, 1996(India), Section 8
18
P.k Bajaj v. Reminiscent India Television Ltd (2006) 2 Arb 361
19
Harinarayan G.Bajaj v. Share deal Financial Consultancy P. Ltd, AIR 2003, Bom 296
20
Exotel mobile communication Ltd v. union of india, (1998) 3 RAJ 307 (Del)
21
ITC Classic Finance Ltd v. Graphic Minning&CO Ltd AIR 1997, cal 397, Arb LR ,(cal)
22
P. Anand Gajapathi Raju &Ors. v. P.V.G. Raju (Died) &Ors, (2000) 4 SCC 539 , Rashtriya Ispat Nigam Limited
and Anr. v. Verma Transport Company, 2006 (7) SCC 275; Agri Gold Exims Ltd. v. Sri Lakshmi Knits and
Wovens and Ors., (2007) 3 SCC 686.

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Court can exercise its powers are (1) there is an arbitration agreement; (2) a party to the
agreement brings an action in the Court against the other party; (3) subject matter of the
action is the same as the subject matter of the arbitration agreement; (4) the other party
moves the Court for referring the parties to arbitration before it submits his first statement
on the substance of the dispute. …. And held the language of Section 8 to be pre-
emptory.” The Supreme Court in H. Srinivas Pai and Anr. V. H. V. Pai (D) thr. L.Rs.
And Ors23.said that “The Act applies to domestic arbitrations, international commercial
arbitrations and conciliations. Reference to arbitration and arbitability depends upon the
existence of an arbitration agreement.

The Supreme Court in Hindustan Petroleum Corpn. Ltd. V. Pinkcity Midway

Petroleums.24 The Court in this case held that if the existence of the arbitration clause is
admitted, in view of the mandatory language of Section 8 of the Act, the Courts ought to
refer the dispute to arbitration. While articulating on this pre-requisite, the Supreme Court
in Sukanyaholdings Pvt. Ltd. V. Jayesh H. Pandya and Anr 25. said that “The relevant
language used in Section 8 is-“in a matter which is the subject matter of an arbitration
agreement”. Court is required to refer the parties to arbitration. Therefore, the suit should
be in respect of ‘a matter’ which the parties have agreed to refer and which comes within
the ambit of arbitration of the Supreme Court.

That the anti arbitration injunction against Avengers is valid or not.

The counsel on behalf of the petitioner humbly submits before this Hon’ble Court that the
anti-arbitration injunction is not valid “anti-arbitration injunction” is an injunction
whereby one party seeks restraining orders against the other party to proceed or
commence with an arbitration proceeding in pursuance of the arbitration agreement
between the parties.." the Courts in India whilst considering Section 8 of the Act refer the
parties to arbitration in terms of an arbitration agreement between the parties. The
Hon'ble Supreme Court in one of its judgment, has held that an arbitration agreement
becomes “inoperative” when it has ceased to have effect due to revocation by one of the

23

24

25

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parties or where an arbitral award has already been made or where the principles of res
judicata is applied26. The Hon'ble Supreme Court in another matter has further observed
that if a proceeding is vexatious or oppressive in nature, party has chosen to put his case
in one way and thereafter it brings the same transaction before the Court taking a contrary
stand with respect to its earlier contentions and accordingly relies on a new cause of
action. "In most cases, anti-arbitration injunctions are part of deliberately obstructionist
tactics, typically pursued in sympathetic local Courts, aimed at disrupting the parties'
agreed arbitral mechanism “even if the power to enjoin arbitral proceedings were
recognized in principle to exist, that authority should be exercised with the utmost
circumspection and only in rare circumstances27

The Hon'ble High Court of Delhi, while dealing with the concept of “anti-arbitration
injunction”, in the matter of “McDonalds India Private Limited v. Vikram Bakshi 28”
observed that the principles which are applicable to an “anti-suit injunction” will not
necessarily be applied to an anti-arbitration injunction as the mere existence or possibility
of existence of multiple proceedings is not a sufficient cause to render the arbitration
agreement inoperative or incapable of being performed.

The Hon'ble Calcutta High Court in the case of “Board of Trustees of the Port of Kolkata
v. Louis Dreyfus Armatures SAS & others 29 ” has summarized, as below, the
circumstances under which an anti-arbitration injunction can be granted:

i) “If an issue is raised whether there is any valid arbitration agreement

between the parties and the Court is of the view that no agreement exists between
the parties.
ii) If the arbitration agreement is null and void, inoperative or incapable of
being performed.
iii) Continuation of foreign arbitration proceeding might be oppressive or
vexatious or unconscionable.” Further in the case of Himachal Sorang Power

26
Balco v. Kaiser aluminium Technical CIVIL APPEAL NO.7019 OF 2005
27
Gary B. Born, International Commercial Arbitration (Kluwer 2009), Vol I, p. 1049 and p. 1054.
28
Mc Donald indiapvt ltd v. VikramBakshi , 2016 SCC OnLine Del 3949
“Board of Trustees of the Port of Kolkata v. Louis Dreyfus Armatures SAS & others, AIR 2006 ,Cal 176-9, P&H
29

124

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Private Limited &Anr. V.s NCC Infrastructure Holdings Ltd 30. The court gave
certain principles governing anti arbitration injunction are Aggrieved should be
encouraged to approach either the Arbitral Tribunal or Court which has the
supervisory jurisdiction in the matter. An endeavor should be made to support and
aid arbitration rather than allowing parties to move away from the chosen
adjudicatory process.
The Judgment of Supreme Court in World Sport Group (Mauritius) Limited v. MSM
Satellite (Singapore) PTE observed that this Court had jurisdiction to entertain a suit,
once a request is made by one of the parties or any person claiming through or under him
to refer the parties to arbitration, this Court would be obliged to refer the parties to
arbitration unless it found that the agreement was null and void, inoperative or incapable
of being performed. Importantly, the Supreme Court also noted that even if no formal
application to refer the parties to arbitration is made and an objection is filed to the effect
that the arbitration has already been invoked and arbitration proceedings have
commenced, that would itself amount to a request made by a party to refer the parties to
arbitration which had already commenced31

That the dispute under DSA is purely contractual or not .

According to the annexure of the DSA clause 16.2 is arbitration clause which suggest that
“any and all disputes arising out of or in relation to this agreement between the parties
hereto or relating to or in connection with this agreement or the performance or non-
performance or of the rights and obligations set forth herein or the breach termination
invalidity or interpretation thereof shall be referred for arbitration in accordance to the
provisions of the Arbitrations and Conciliation Act 1996 or any amendment thereof”

Section 7 of the Arbitration and Conciliation Act states Arbitration agreement. In this
Part, “arbitration agreement” means an agreement by the parties to submit to arbitration
all or certain disputes which have arisen or which may arise between them in respect of a
defined legal relationship, whether contractual or not.32

30
Himachal Sorang Power Private Limited &Anr. v. NCC Infrastructure Holdings Ltd(CS COMM 12/2019)
31
World Sport Group (Mauritious) Ltd. v. MSM Satellite (Singapore) Pte. Ltd: , 2014 (11) SCC 639
32
The Arbitration and Conciliation Act, 1996, Act No. 26, Acts of Parliament, 1996(India), Section 7

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To constitute an arbitration agreement there must be an agreement that is to say the

parties must be ad-idem33 to be enforceable, the agreement must be made by free
consent34 and an arbitration clause in its nature assignable 35. The dispute herein arises out
of the contract that is the DSA between the parties, As long as the Arbitration clause
exists, having recourse to Civil Court for adjudication of disputes envisaged to be
resolved through arbitral process or getting any orders of the nature from Civil Court for
appointment of Receiver or prohibitory orders without evincing any intention to have
recourse to arbitration in terms of the agreement may not arise36

The Supreme Court, while raising a presumption for the validity of an arbitration clause
in an agreement, in India Household and Healthcare Ltd. V. LG Household and
Healthcare Ltd37. Said that the Courts would construe the agreement in such a manner so
as to uphold the arbitration agreement. According to moot proposition para 18 when
Avengers through a newspaper publication were came to know that Thanos had applied
for a patent in process for manufacturing Cap'Am at a mass commercial wealth. And
according to moot proposition para 19 “Avengers were shocked to see that on one hand
Thanos kept declaring the quality test results which was the basis of payment of
milestone 3 and on the other hand it was receiving award for the technical know-how and
confidential information of Avengers and also getting Avengers confidential information
and technical know-how at the same time.” When Thanos moved the Court asking for
permanent injunction against Avengers then only the avengers filed application under
Section 5 and 8 of the ACT and prior to that according to facts an arbitration on the said
subject matter has already been invoked ( para 27, 22).

Section 6 of the Indian Patent Act states the Persons entitled to apply for patents.
1)Subject to the provisions contained in Section 134, an application for a patent for an
invention may be made by any of the following persons, that is to say a) by any person
claiming to be the true and first inventor of the invention 38 an invention is not a property
33
Rawalpindi Theatre v. Patanjali AIR 1967, (Punj) ,241
34
The Indian Contract Act, 1872, Section 10
35
Khardoh & Co. v. Raymon & co. AIR 1962 SC 18-10
36
Smt. Kalpana Kothari v. Smt. Sudha Yadav and ors. Civil Appeal 7407-7406 of 2001, Decided on 31 October
2001
37
India Household and Healthcare Ltd. v. LG Household and Healthcare Ltd (2007) 5 SCC 510.
38
The Indian Patent Act 1970, Section 6

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right unless it has been patented39. Thanos has not patented the cap Am. Clause 9 of the
DSA specifically clause 9.3 which states “avengers hereby assigns and shall procure that
all third parties engaged in the performance of the services shall assign absolutely to
Thanos” though the petitioner had assigned his rights to that plaintiff the latter had not
registered the assignment under the provisions of the Indian patents and designs act
therefore he was not the patentee within the meaning of the Act40

Moreover their contention that the dispute is inarbitrable holds no ground when prima
facie their exist a arbitration clause meeting the proviso of Section 7 of the Arbitration
and Conciliation Act 1996 under the DSA clause in the case of Ministry of Sound
International v. M/s Indus Renaissance Partners41 it was held that the disputes relating to
IPR can be Arbitrated. A reference of all disputes and differences which existed between
the parties is not cut down or limited by a recital of specific disputes

Thus the counsel on behalf of the petitioner humbly submits that the dismissal of the suit
on the basis of the application u/s 5 and 8 has been rightly dismissed.

 Whether the sole arbitrator is to be appointed in accordance with the procedure

mentioned in the arbitration agreement under DSA, under Section 11 application
before Supreme Court of Wakanda.
Avengers has invoked the arbitration in terms of Clause 16 of DSA and in the letter of
invocation, it has stated that it disagreed to the appointment mechanism under clause
16.2.
The vast majority of international convention and entities handling with the arbitration
recognize the principle of party autonomy in selecting arbitrators or in choosing the
methods based on which the selection will be made.
a) Geneva Protocol and Geneva Convention- it states in Art. II that “the
constitution of the Arbitral Tribunal shall be governed by the will of the
parties and by the law of the country in whose territory the arbitration takes
place.”

39
Shining industries v. Shri krishna Industries, AIR 1975, ALL LJ960.
40
HiralalBanjara ( Patents & Designs Act ) re AIR 1937 ILR ( Cal ) 365
41
Ministry of Sound International v. m/s Indus Renaissance Partners I.A. NO. 2926/2008 IN CS (OS) NO.
241/2008

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Geneva convention, in Art 1(2)(d) provides that the arbitral tribunal is to be

constituted “in the manner agreed upon by the parties in conformity with the
law governing the arbitration procedure”.
b) New York Convention- There are several provisions of this convention that
address the issue of selection of the arbitral tribunal. Art. V(1)(d) of the
convention provides that recognition of an award may be refused if “the
composition of the arbitral authority…..was not in accordance with the
agreement of the parties or, failing such agreement, was not in accordance
with the law of the country where the arbitration took place”.
c) European Convention- In comparison of New York Convention, it provides
expressly the parties autonomy in selecting arbitrators. In this respect, Article
IV(1)(b) states that “parties shall be free to submit their disputes to an Ad-hoc
arbitral procedure, in this case, they shall be free internally, (i) to appoint
arbitrators or to establish means for their appointments in the event of an
actual dispute, (ii) to determine the place of arbitration, and (iii) to lay down
the procedure to be followed by the arbitrators.”
Whether the appointment of sole arbitrator under clause 16.2 of DSA is arbitrary in
nature or not.
Clause 16.2 of the DSA states that Arbitration shall be conducted by a sole arbitrator to
be appointed by the Avengers out of the panel of three people suggested by Thanos
herein.

Black’s Law Dictionary defines an ‘arbitrator’ as ‘a neutral person who resolves disputes
between parties, especially by means of formal arbitration. Also termed (in Latin)
Compromissarius.42’

The term ‘arbitrator’ has been more comprehensively defined in the Advanced Law
Lexicon as ‘The arbitrator is the person to whose attention the matters in dispute are
submitted- a judge of the parties’ own choosing, whose functions are judicial, and whose
duties are not those of a mere partisan agent, but of an impartial judge, to dispense equal

42
Black’s Law Dictionary, eighth edn., 2004, p. 113.

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justice to all the parties, and to decide the law and facts involved in the matters submitted,
with a view to determining and finally ending the controversy43.

In MMTC Ltd. v. Sterlite Industries (India) Pvt. Ltd 44., a two judge bench of the Supreme
Court held that the appointment of the arbitrators must be governed by Section 11 of the
Act, Sub-section (3) of the Section 11 provides that two nominated arbitrators were
required to appoint a third arbitrator to act as the presiding arbitrator, failing which, the
Chief Justice or his designate, would be required to appoint the third arbitrator as
required by Section 11(4)(b) of the Act.

If the arbitrator appointed by one party becomes the sole arbitrator, in default of
appointment by the other, he is in the same position as a sole arbitrator, and must of
course, act judicially45. That is to say he ‘has the same duty to act judicially, fairly and
impartially as a single arbitrator, although he has been appointed by one of the parties,
rather than both the parties.46’

For the valid appointment of an arbitrator, three conditions are a sine qua non. First, the
arbitrator must have been notified of his appointment and he must have expressed his
willingness to act. Secondly, the other party must have agreed to an agreement, and
thirdly, the matters which are to be referred to arbitration. Once these conditions are
satisfied, the appointment is perfected. The constitution of the Arbitral Tribunal and the
manner in which it is to be appointed depends upon the agreement between the parties, as
most classes of contracts have developed established structures and procedures, which
have been settled by the parties, to suit the circumstances of their particular agreement.

The most common forms of the contract of appointment, mechanism are-

a) The arbitration by a sole arbitrator named in the arbitration agreement.

b) Arbitration before a sole arbitrator to be agreed upon by the parties after the dispute
has been arisen.
43
P. RAMANATHA AIYAR’S Advanced Law Lexicon, third ed. 2005, 326.
44
MMTC Ltd. v. Sterlite Industries (India) Pvt. Ltd, (1996) 6 SCC 716, North East Securities Ltd. v. Sri Nageswara
Chemicals and Drugs Pvt.Ltd., (2001) 1 Arb LR, 70(AP), Rapti Contractors v. Reliance Energy Lts. & Ors., (2009)
2 Arb LR 7(Del)
45
Veritas Shipping Corpn v. Anglo-Canadian Cement Ltd., (1996) 1 Lloyd’s Rep 76-77
46
Russell on Arbitration, twenty-third ed,, 2007, pp. 171-172, para 4-145

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c) Arbitration before a sole arbitrator nominated by a trade or professional institution.

d) Arbitration by tribunal of three arbitrators, one nominated by each of the parties, and
the third to be appointed either by the nominated arbitrators, or in default by the Chief
Justice or any person or institution, designated by him47.

The Section also applies to an agreement for reference to three arbitrators, one to be
appointed by each party and the third party by the two arbitrators, since by virtue of the
Section48, the third arbitrator to be treated as a presiding arbitrator (formerly an empire)49.

There is a common structure and pattern to appoint a sole arbitrator and that is not
followed by the respondent. The panel of three arbitrators, among which one has to be
chosen by the petitioner, was solely chosen by the respondent and hence it invokes the
further issues of partiality, biasness50 and there will be no independency. Hence the
petitioner humbly challenges the procedure of appointing the arbitrator u/s 12(3)(a) 51 and
13 of the Act.

Impartial means unbiased, disinterested52. Following Article 12 of the UNCITRAL

Model Law, Section12 of this Act, also uses the two words ‘independence’ and
‘impartiality’ disjunctively as ‘independence or impartiality’, in the context of the role of
an arbitrator in arbitration proceedings.

In International Airport Authority of India v. KD Bali, Sabyasachi Mukherjee J.

emphasized the need for impartiality on the part of an arbitrator in the following
language, ‘It is well settled that there must be purity in the administration of justice as
well as in administration of quasi-justice as are involved in the adjudicatory process
before the arbitrators53.’

47
The Arbitration and Conciliation Act, 1996, Act No. 26, Acts of Parliament, 1996(India), Section 11(4), (5) and (6)
48
S.S. Den of Airlie Co. Ltd. v. Mitsui & Co. Ltd., (1912) 106 LT 451
49
ibid
50
Trishul Const. Co. v. Delhi Development Authority, (1994) 2 Arb LR, 303 (Del), Shivagun Factory v. Dharam
Chand, (1995) 2 Arb LR, 111 (J&K), Chintakayala Shivaramakrishna v. Nandimpali venkata Rama Raju, (2013) 1
Arb LR, 384 (AP)
51
(3) An arbitrator may be challenged only if— (a) circumstances exist that give rise to justifiable doubts as to his
independence or impartiality
52
Black’s Law Dictionary, eighth edn., (2004).
53
International Airport Authority of India v. KD Bali, (1988) 1 Arb LR, 408

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The power to appoint an arbitrator is coupled with the duty to appoint an independent and
impartial arbitrator who would conduct the arbitral proceedings effectively, efficiently
and diligently to achieve the desired result of early conclusion or the arbitral proceedings
within reasonable cost and expenses.54

Intendment of this Section is that if the other side is not ready to follow the procedure, the
applicant may approach the Court with an application for a direction to the other side to
follow the procedure or in the alternative to request the Court to appoint arbitrator in
terms of the scheme. No person has a right to say that he would not follow the procedure
prescribed under the arbitration clause and if he does so, then the Court shall appoint an
arbitrator55

Section 13(1) provides that both the parties have the freedom to decide on a procedure to
challenge the appointment of an arbitrator, and a certain degree of judicial control in the
background. It represents a ‘two level system’. It grants to the parties, the freedom to
agree on a procedure for challenging an arbitrator 56, subject to Court control57, and fair
trial by an impartial tribunal58.

Limitations of party autonomy despite the wide recognition of the principle of party
autonomy in selecting the arbitrators, most national laws impose some limitations in
order to guarantee the effectiveness and efficiency of arbitral proceedings. Generally,
such limitations refer to: (i) Avoidance of one sided mechanisms for selecting arbitrators,
(ii) Prohibitions against arbitrators who lack impartiality and/or independence;(iii)
Requirements of minimum qualifications; (iv) Requirements related to nationality or
religion59.

The concept of party autonomy was enunciated in the central legislature itself. However,
this was subject to specific restrictions. The Supreme Court itself has acknowledged that

54
Ariba India Pvt. Ltd. v. Ispat Industries Ltd., (2011) 3 Arb LR 163
55
D. Raja Reddy v. Director General Institute of Agricultural Extension Management, (1992) 2 Arb LR 212
56
The Arbitration and Conciliation Act, 1996, Act No. 26, Acts of Parliament, 1996(India), Section 13(1)
57
Ibid, Section 13(4) and (5)
58
The Arbitration and Conciliation Act, 1996, Act No. 26, Acts of Parliament, 1996(India), Section 18
59
G. Born, International Commercial Arbitration, Vol. II, Second Edition, Wolters Kluwer, Netherlands, 2014 p.
1659.

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the Indian Arbitration Act, 1996 envisages party autonomy 60. But there is a dearth of
Indian Case Laws dealing with this issue. This led the Courts to fall back to English
jurisprudence to decide on the point of law61. Furthermore, in the recent Bombay HC
decision62 By Justice R.D. Dhanuka, the Court disregarded the principle of party
autonomy which is the de facto globally recognized norm in arbitration.

Under Section 11(2) of the Act, there must be an agreement between the parties on a
"procedure to appoint an arbitrator" and not an agreement "on the power/authority/right
to appoint the arbitrator". Legislature never intended to confer unilateral power on a party
to appoint a Sole Arbitrator. The Respondent could not have unilaterally proceeded to
appoint the Sole Arbitrator and Court alone would have the authority to make an
appointment, in exercise of its powers under Section 11(5) and (6) of the Act63.

Apart from being unconscionable and the result of unfair bargaining, the ability of one
party to appoint an arbitrator, amounts to power vested in that party alone, to interpret the
contract. This unilateral power to interpret the contract, is akin to the power to amend it,
simply because the arbitrator can choose to interpret the contract as he likes, to be more
specific, as his nominator likes. Our Supreme Court has laid down that a contract giving
only one of the two parties a power to amend the contract is void. Thus by this reasoning,
an arbitration clause providing for a sole nominee arbitrator is equally void and
unenforceable64.

One party cannot usurp the jurisdiction of the Court and proceeds to act unilaterally. A
unilateral appointment and a unilateral reference- both will be illegal65.

Whether there was a valid contract under clause 16.2 and 16.3 of DSA.

60
SVG Molasses Co BV v Mysore Mercantile Co Ltd 2007 (9) SCALE 89
61
Andhra Bank Ltd. v. R. Srinivasan AIR 1962 SC 232
62
M/s. Addhar Mercantile Pvt. Ltd. v. Shree Jagdamba Agrico Exports Pvt. Ltd- Arbitration Application No 197 of
2014 along with Arbitration Petition No 910 of 2013
63
M/S Kadimi International Pvt. ... v. M/S Emaar Mgf Land Limited on 29 August, 2019
64
National Fertilizer Corporation v. Puran Chand Nangia, (2000) 8 SCC 343
65
Dharma Pratishthnaman v. Madhok Construction., (2005) 9 SCC 686

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Section 10 of the Indian Contract Act, 1872 states that a contract is said to be valid when
there is free consent of both the competent parties with lawful consideration. Free consent
is further defined u/s 14 and it is said to be free when it is free from coercion, undue
influence, fraud, misrepresentation and mistake.

It must arise out of mutual consent the parties’ consent is the basic requirement for the
arbitration agreement. Their intention to submit to arbitration must unequivocally arise
from the agreement. The New York Convention (article II.1) requires that the agreement
must have originated from the parties’ free will. Therefore, if one of them has acted
induced by error or as a consequence of fraud, coercion or undue influence, there has
been no real consent and the agreement to arbitrate is not valid.

In the present case, Avengers does not have free consent while signing the arbitration
contract as their consent was affected by undue influence of a very large scale company
which wants to business with Avengers. It further invokes Section 4 of The Competition
Act, 2002 which deals with the abuse of dominant position.

Dominant Position means a position of strength, enjoyed by an enterprise, in the relevant

market, in India, which enables it to― (i) operate independently of competitive forces
prevailing in the relevant market; or (ii) affect its competitors or consumers or the
relevant market in its favour.

The judgment of the Supreme Court in, Pioneer Urban Land & Infrastructure Ltd. v.
Geetu Gidwani Verma66, wherein it has been held that the Courts are empowered to strike
down an unfair and unreasonable contract, or a clause.

The only other Indian High Court that has decided upon the enforceability of such clauses
is the Delhi High Court, which has adopted the opposite view. In Bhartia Cutler Hammer
Ltd. v. AVN Tubes,67, the Court first decided upon this matter, holding that the apparent
inequality in rights given to parties under the clause would render it void contract is
entered into between parties who are not equal in bargaining power.

66
Pioneer Urban Land & Infrastructure Ltd. v. Geetu Gidwani Verma , C.A. No. 12238 of 2018
67
Bhartia Cutler Hammer Ltd. v. AVN Tubes, 1995 (23) DRJ 672

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It is humbly submitted by the petitioner that the clause 16.2 and 16.3 of the arbitration
agreement were not valid as they violates the right of the petitioner.

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PRAYER

Wherefore in the light of the issues raised, arguments advanced and authorities cited, it is
humbly requested that this Hon’ble Court may be pleased to adjudge and declare-

1. That the application file under Section 9 of the Act, is not rightly dismissed by the High
Court of New Wakanda City.
2. That the suit filed by the respondent is rightly dismissed on the basis of the application
filed under Section 5 & 8 of the Act.
3. That the appointment of Sole Arbitrator should not be done according to the clauses of
DSA under Section 11 of the Act.

And pass any such order or decision as the Hon’ble Court deems fit and proper, for this the
Petitioner shall duty bound pray.

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